May 25, 2021

Airlines will be back in business by year-end 'if we do it right', says Tim Clark

categories : aviation

Equitable vaccine rollout, simplified testing to help recovery

Air travel demand can return to pre-COVID-19 levels before the end of 2021 and bring much-needed relief to the airline industry if border restrictions and health protocols are eased and vaccine distribution is ramped up further globally, Tim Clark president of Emirates said on Monday.

The air transport industry has been acutely impacted by the massive decline in passenger traffic, which tumbled by about 90 percent during the early stage of the pandemic and caused airlines to bleed billions of dollars in cash.

“The question is how we navigate the next six months, and if we do it right - like vaccines are scaled, there is equitable rollout, testing regimes are simplified and cost cheaper – all this lends to the theory that by the end of the year, we will be back in business at summer scale,” Clark said during a keynote interview with JLS Consulting’s John Strickland to mark the opening of the Arabian Travel Market (ATM) virtual summit.

Clark had earlier forecast that air travel will return to normal levels by the summer of 2021 if vaccines are rolled out during the first quarter of the year. However, the recovery has been stalled in the face of renewed restrictions, lockdowns and surge in new cases in some parts of the world, including India.

Slower than expected

Clark said he’s still optimistic that the pandemic will eventually be over and that the travel industry will recover, albeit slower than expected. “I thought by April, May, June we will be seeing some relief with regards to the demand for travel, primarily in the latter part of summer and the winter this year. That slowed a little bit,” Clark said.

The delayed recovery has been due to several factors, including the re-introduction of restrictions, lack of consensus among countries on travel protocols, inequitable distribution of vaccines, as well as the emergence of COVID-19 variants.

“I think, eventually we will get there. The problem we face at the moment is that nobody is really sure of all the variables that come into this particular problem we face, whether it be the virus itself, the variants, the efficacy of the vaccines, the types of vaccines, the rate of rollout, scalability or availability of production and the surge in cases in countries like India,” Clark said.

“Things like what has happened in India recently don’t help, because clearly, that has [impacted the country] and has had ripple effects across the global economy, firstly by what everyone sees. That, in itself, is going to inhibit demand. People are going to be a little bit nervous [about travelling],” he continued.

Factors impacting recovery

He said there’s still a lot to be done to make travelling during the pandemic easier for passengers, such as by simplifying PCR tests, making test results available quickly and having a clear set of travel protocols in various destinations.

The International Air Transport Association (IATA) has long been urging governments to come up with a unified set of protocols to ease the complexities that passengers face when crossing borders during the pandemic. Different countries have different sets of requirements in place, such as PCR testing, quarantine and other protocols. These, according to IATA, have “killed” travel demand.

Last April, IATA estimated that the airline industry’s net losses would reach $47.7 billion in 2021, an improvement on the estimated loss of $126.4 billion in 2020. Despite the lower net loss, the crisis is still “longer and deeper than anyone could have expected,” said Willie Walsh, IATA’s director general.

The air transport body also forecast that travel demand, measured in revenue passenger kilometres, will recover to 43 percent of 2019 levels over the year. While that is also a 26 percent improvement on 2020, IATA said “it is far from a recovery”.

Emirates

At Emirates, Clark noted that the airline is doing better than expected, although the past year has been a period of “red ink”. “We’re a lot further on and much better than what we thought we would be this time,” Clark said.

The airline, the world’s largest operator of A380sm was forced to ground most of its aircraft after air traffic plunged last year.

Emirates has 115 A380s in its fleet. Since the UAE eased its COVID-19 restrictions last year and re-opened the economy, the airline has re-redeployed its aircraft to various destinations worldwide, but so far, only about 15 to 20 A380s are flying every week, according to Clark.

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